Fund Strategies and Market Commentaries
As of November 18, 2014

Midas Magic continues to focus primarily on large companies, with a broad orientation towards attractively priced value and growth stocks.  The companies held in the Fund’s portfolio typically enjoy global operations, and the top performing holdings in the recent period included MasterCard Inc. and Becton, Dickinson and Company, although the more “defensive” North American company Costco Wholesale Corp. also added to recent returns.  The Fund’s positions in oil and gas companies, including Apache Corporation and Chesapeake Energy Corp., hindered performance as the price of oil continued to decline below $80 a barrel.  Through the fourth quarter of the year, the Fund anticipates maintaining a leveraged investment position in quality companies, aggressively positioning the Fund to seek its investment objective of capital appreciation.

Midas Fund’s strategy continues to be focused on higher quality senior and intermediate producers of precious metals and other natural resources, including energy.  Inasmuch as the macroeconomic policies of the world’s largest economies have not changed, which we consider constructive for investing in hard assets such as precious metals, we believe our patient focus on quality may be rewarded in the long term.  In the short term, however, the recent decline in the gold price below $1,200 per ounce and the oil price below $80 per barrel has negatively affected returns, and the shares of miners with higher costs or leveraged balance sheets, such as Kinross Gold Corp., Yamana Gold Inc., and AngloGold Ashanti Ltd., have fallen sharply.  At the same time, the Fund’s holding of BHP Billiton Ltd, one of the largest mining companies in the world, has held comparatively steady.  Midas Fund substantially de-leveraged the portfolio at the end of the last quarter, and may seek to re-position the portfolio in view of recent market action by adding to some current stockholding and introducing new names into the portfolio.  Companies the Fund anticipates adding to its portfolio will normally be those with promising exploration potential, expanding production profiles, increasing cash flow, and/or other special growth features.

Midas Perpetual Portfolio’s core asset allocation strategy is to invest, consistent with tax planning and lower levels of portfolio turnover, a “Target Percentage” of its total assets in each of the following categories: gold, silver, Swiss franc assets, hard asset securities, and large capitalization growth stocks. The Fund’s investment objective is to preserve and increase the purchasing power value of its shares over the long term.  The Fund benefited most in the recent period from its holding of UnitedHealth Group Inc., while the Fund’s allocation to hard asset securities in the mining sector hindered returns.  Although currently the Fund has an over-target allocation to gold and an under-target allocation to silver, combined the precious metal allocation is near target. In the recent period, the Fund added leverage to the portfolio with an increased allocation to large capitalization growth stocks, such as Merck & Co., Inc., Twenty-First Century Fox Inc. Class A, and International Business Machines Corp.



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